Agreement expected this week in EU-China trade dispute

The European Commission and China continue to wrangle for a compromise in the ongoing trade dispute over dumping prices on imported Chinese PV products. Insiders expect an agreement this week.

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Intensive negotiations are continuing in an effort to find a settlement, Helene Banner, the spokeswoman for EU trade commissioner Karel de Gucht, told pv magazine. Yet Banner could not comment on the state of negotiations nor on the EU's position on a minimum price for imports of Chinese crystalline modules.

pv magazine, however, has learned from well-informed sources that the EU has now brought a minimum import price of well below €0.60 per watt into play.

The original negotiating positions of both parties thus appear to be narrowing between the EC’s earlier reported minimum import price of €0.65 and the preferred Chinese price of €0.50.

Last week, German news agency DPA, citing confidential EU documents, reported that Brussels would offer a 15% reduced minimum import price. Applying the 15% discount to the €0.65 original target would result in a possible compromise for a minimum import price of €0.55 per watt.

Negotiations are currently moving in that direction, industry sources confirmed to pv magazine. Chinese negotiators have also signaled a willingness to compromise and are likely to make a final offer in the coming days. A settlement is expected this week.

Leading Chinese module manufacturers could apparently live reasonably well with a minimum import price of €0.55 per watt in the EU. However, they would then likely expand their distribution operations massively in Europe to better compete against European rivals that offer similar pricing, an industry source told pv magazine.

This would change the distribution structure in Europe and weaken the strong wholesale sector. In addition, the many smaller, lesser known photovoltaic manufacturers that are currently responsible for the majority of Chinese module imports to the EU would probably fall victim to a minimum import price of €0.55 per watt.

This would significantly strengthen the apparent consolidation process Beijing appears to be forcing on the Chinese photovoltaic industry.

In addition, a minimum import module price at that level would have a significant impact on Europe’s installation sector. It would very likely endanger the profitability of many projects. In addition, European and non-Chinese module and cell manufacturers, at least in the short and medium term, would not be able to make up the resulting shortage in the supply chain.